Many working Americans struggle to manage their money on an ongoing basis, especially when unplanned bills pop up out of the blue. But most U.S. employees have the benefit of knowing how much money they'll be collecting in their paychecks on a regular basis. For 20% of Americans, however, that figure is much harder to come by. That's because roughly one in five Americans deals with unpredictable income, according to a new report by financial services company Netspend.

One reason why variable incomes are so widespread is that the gig economy has really taken off. So, those who work on a freelance or contractor basis are frequently subject to substantial fluctuations in monthly income. The same holds true for small business owners who tend to do well seasonally but struggle for the remainder of the year.

Woman sitting on couch in front of laptop, holding her head as if stressed


Not surprisingly, 59% of Americans with variable income say it's either difficult or very difficult to save money. But if you're grappling with a variable income, there are a few things you can do to overcome that challenge.

1. Base your fixed expenses on your lowest income

One of the best ways to keep track of your spending and ensure that you're meeting your savings goals is to follow a budget. But it's hard to set up a budget when you don't know exactly how much income to base it on. Your best bet, therefore, is to commit to fixed expenses that your lowest monthly income can cover. This way, you'll avoid racking up debt during periods when business is slower.

Imagine that over the past year, you've earned anywhere from $4,000 to $7,000 on a monthly basis. In that case, you should base your budget on that $4,000 figure and only commit to fixed expenses -- things like rent, a car payment, a phone plan, and a cable package -- that you're able to pay for based on that lower earnings figure. If you go overboard on fixed expenses, you might easily land in debt any month your earnings come in on the low side.

As far as variable expenses go (things like food, utilities, and leisure), aim to keep them low when your earnings are low, and feel free to spend a bit more when your income rises. Of course, you won't have this option with every variable expense. For example, you can't torture yourself inside a freezing house because you're in the midst of a lower-earning month and don't want to pay for adequate heat. But you can cut back on things like expensive groceries or takeout meals when your earnings dip.

2. Capitalize on cash influxes

Just as you're apt to have months of lower earnings, so too will you be privy to months when your income gets a boost. The smart thing to do here is to take advantage of those higher paychecks while you have them, whether by padding your emergency savings, making additional contributions to your retirement plan, or paying down existing debt so that it eats up less of your income.

Now this isn't to say that you can't spend a little more money when your income goes up. For example, if you have a month when your earnings are $1,000 higher than usual, then go ahead and buy concert tickets, or treat yourself to a new gadget with some of that cash. But don't blow all of it. Instead, sock a good amount away so that when your income declines, you have more of a cushion to fall back on.

Dealing with a variable income isn't easy. Budget carefully and take advantage of upswings to avoid undue financial stress.